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Russian Businesses Sitting on $225Bln in Cash

Russian companies boosted their coffers by 21% in 2018.

The lack of private investment by Russian companies has been cited as one reason for Russia's slow growth. Vitaly Nevar / TASS

Russia’s richest 10 companies were sitting on 3.4 trillion rubles ($53 billion) of cash at the end of last year, analysis by Russian news site RBC has shown.

The firms with the biggest reserves in “cash and equivalents” — an accounting term which covers cash deposits and any other assets which can immediately, and without difficulty, be turned into cash — were state-backed energy giants Gazprom and Rosneft. Both were sitting on more than 800 billion rubles ($12.5 billion) at the end of 2018.

Across all of Russia’s two million firms, Russian businesses held 14.7 trillion rubles ($228 billion) in cash at the end of 2018, up 21% over the year, the RBC analysis based on company reports and data from state statistics agency Rosstat shows.

Economists have pointed to this accumulation of assets by companies, instead of investments, as one reason for Russia’s sluggish growth, expected to be around 1% in 2019. 

“Companies are sitting on huge deposits, paying off foreign debt, paying huge dividends and exporting capital. They just aren’t funding enough projects and don’t have enough economic activity,” Alfa Bank chief economist Natalia Orlova previously told The Moscow Times. 

State-owned Russian Post and Russian Railways were also named as among the top 10 cash hoarders. As was Surgutneftegaz, an energy company that accounts for 10% of Russia’s oil output and has seen sharp volatility in its share price this year leading to speculation about the firm’s highly-secretive ownership structure.

If other financial instruments, such as short and long-term financial investments were accounted for, Surgutneftegaz would come out as the richest Russian company, RBC said, with estimated reserves north of $50 billion.

The analysis of the top 10 excludes financial companies, whose operations dictate keeping large amounts of readily-available cash on their balance sheets. Russia’s largest bank alone, Sberbank, had 2.3 trillion rubles ($36 billion) in cash reserves at the end of 2018, its financial reports show.

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